Which are the Most Expensive Ethereum Domains?
Over the past six months, interest in Ethereum Name Service (ENS) domains has skyrocketed - but why is this happening?
In September alone, new registrations reached 437,000, with domains trading for millions of dollars on secondary marketplaces like OpenSea.
According to data compiled by ENS Domains, registrations increased 57% in September, up from 301,000 the previous month.
September 2022 stats for ENS
– 437k new .eth registrations (total 2.6m names)
– $5.5m in protocol revenue (all goes to the @ENS_DAO)
– 35k new eth accounts w/ at least 1 ENS name (total 572k)
– 1,431 DWeb content records set (total 14,393)
– 97% of OpenSea domain volume pic.twitter.com/QVDXsr4VQN
— ens.eth (@ensdomains) October 1, 2022
Since May, the number of ENS domain names registered has more than doubled to 2.6 million. It took five years for the protocol to reach one million.
The OpenSea NFT marketplace accounts for 97% of ENS domain volume, generating $5.5 million in revenue for the protocol. Revenues increased by 17% in August compared to the previous month.
What are ENS domains?
ENS domains are like Web2 sites (e.g., johndoe.com), only this time it’s in Web3 (johndoe.eth). Web3 is the idea of a decentralized internet powered by blockchain technology and a token-based economy.
ENS domains are based on the Ethereum blockchain and are a type of custom crypto wallet that contain recognizable names or numbers. They simplify the typical Ethereum address, which is a long list of alphanumeric characters, and allow users to send and receive funds more easily.
Users can register domain names on the Ethereum Name Service website for a fee ranging from $5 to $640 in ETH.
The fee is based on the number of characters in the domain name – five, four, three, etc. The fewer characters, the more expensive the name. ENS is a decentralized, autonomous open source organization (OSO) that has managed the domain name system since its inception in 2017.
A number of prominent crypto industry figures, such as Ethereum co-founder Vitalik Buterin (vitalik.eth), have acquired personal ENS domains.
Large companies have also started registering or buying their own ENS on secondary markets – for example, chanel.eth, nike.eth, hermes.eth and others. Tens of thousands of dollars have been paid for these, but the most expensive ones are valued much higher.
“09jul.eth” is the fifth most valuable. The domain was sold on May 8, 2022 for 95 ETH (~$240,000). The seller had bought the NFT ten hours earlier for just $10.
Other domains with erotic themes, like “p**n.eth”, sold on Ethereum for much more – 184 ETH – but the dollar value was $204,000.
The fourth most expensive domain name is “abc.eth”, which sold for 90 ETH (~$254,000). The domain had four unique owners and was sold for the first time on October 31, 2019 for 4 ETH or $763.
The third most valuable ENS domain is “000.eth”, which was sold on July 3, 2022 for around 300 ETH. That’s a total of about $317,000. The seller, who goes by the pseudonym EtherOS on OpenSea, originally bought the domain on June 10, 2020 for 2.6 ETH, or $638.
The 000.eth domain has had six different owners over the course of its existence and was first sold on Nov. 9, 2019, for just $52, according to nonfungible.com.
On September 22, the domain “pjfi.eth” was sold for 350 ETH, worth $463,200 at the time. It is currently the second most expensive ENS domain name of all time. The seller had bought it just a few days earlier on OpenSea for only 0.12 ETH, or $161.
According to nonfungible.com, the most expensive ENS domain to date is “paradigm.eth”. In October 2021, a buyer paid 420 ETH, or over $2 million, to acquire the domain name.
Paradigm, a leading cryptocurrency venture capital firm has denied speculation that it made the purchase.
Why the sharp increase in interest?
Nick Johnson, founder and lead developer of the domain service, said that the sharp increase in “new ENS registrations and secondary sales is due to interest in the 999 Club or 10k Club”.
These are “online social clubs for holders of three- or four-digit ENS domains” – the most popular, rare, and expensive domain names. Buterin, the co-founder of Ethereum, said the same thing in 2020, pointing to scarcity as a major factor.
“ENS names with three and four letters: They are an integral part of the supply and you can do different things with them”, he wrote on Twitter.
Crypto research firm Delphi Digital noted that enthusiasm increased when the domain name 000.eth was sold in July for a then-record price of 300 ETH. Traders are believed to have been struck by FOMO (fear of missing out on unique and limited .eth domains).
So a domain with a good and simple name is something that businesses might need in the near future. It’s like the 1990s with .com domains. Buyers simply invested in the domain names so a company could buy them at a higher price in the future.